LET'S TALK National Minimum Wage Act: who needs to comply, how to comply and more
The end of 2018 was an exciting one in the Labour Law field, with several Acts being passed which made a number of changes to this dynamic field of law. One of these changes was the introduction of the National Minimum Wage Act (“NMWA”). The first pay day where the minimum wage was implemented has come and gone and we address some of your questions about this change.
Q: Who does the minimum wage apply to?
A: Everyone except for volunteers and certain state employees.
Q: What is the minimum wage?
A: The minimum wage in South Africa is R20.00 per ordinary hour worked. Domestic workers, farm workers, employees in the expanded public works program and employees on learnership agreements have a lower minimum wage.
Q: There was a sectoral determination for wages passed for Domestic Workers in December 2018. I’m confused whether to use the sectoral determination or the minimum wage.
A: The sectoral determination made provision for two separate hourly wages depending on the area in which the employer fell. Port Elizabeth falls into Area A.
The NMWA prescribes that domestic workers should be paid R15.00 per hour, regardless of where they work. The NMWA takes precedence and domestic workers must be paid a minimum of R15.00 per ordinary hour worked.
Q: My employees only work for 3 hours a day. What do I pay them?
A: An employee cannot be paid for less than four hours of work a day. If your employee typically only works for 3 hours on any particular day, you need to ensure that his salary is at least the minimum hourly wage x 4 for that day. If it is less than this, you will be underpaying him/her.
This rule however only applies if the employee earns less than the threshold which is currently R205,433.33 per annum.
Q: What will happen to me if I don’t pay minimum wage to my employee, is this such a big deal?
A: Previously the Department of Labour would deal with any issues employees had regarding their salaries. With the introduction of the NMWA, the CCMA has been given jurisdiction to deal with these disputes as well.
Now an employee can simply refer their dispute regarding an employer’s failure to pay the minimum wage and/or their agreed salary in terms of their employment contract to the CCMA. The matter will be set before a commissioner and, if the employer has contravened the minimum wage and/or the agreed salary, the commissioner may make an award against the employer. The award may include a fine in the amount of the greater of twice the underpayment or twice the employee’s monthly wage for a first offence.
These awards may be enforced through warrants of execution and contempt of court proceedings.